A Portuguese fractional hotel development located opposite a Nick Faldo-designed golf course has entered its third phase of construction following strong overseas sales.

UK-based developer and investment company Morgan Forbes was able to raise prices at the Ponta do Pargo development at the end of 2009.

“Sales were consistent throughout last year and we’re planning on expanding the company because of the positive reaction from investors,” marketing manager John Ward told OPP.

Fractional property is generally viewed by the industry as a lifestyle product, but Ward said investors were happy with the idea of shared ownership. “We’ve always had very positive conversations about the fractional model.”

Buyers are attracted by the low entry level of under £18,000 and the expected investment return of over 220% over five years, he added. “We’ve also had a good level of customers doing repeat business with us, buying more fractions or even a whole room when they realise the potential for more investment.”

Investors receive 28 nights’ room rental income including the option of seven free nights accommodation. “We’re finding a younger type of investor is coming to Madeira, looking for a place they can come for an active holiday rather than for retirement.”